Assuming that a project has already been evaluated using the following techniques, the evaluation under which technique is least likely to be affected by an increase in the estimated residual value of the project? * O payback period O internal rate of return O net present value O profitability index

Assuming that a project has already been evaluated using the following techniques, the evaluation under which technique is least likely to be affected by an increase in the estimated residual value of the project? * O payback period O internal rate of return O net present value O profitability index

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 24Q: How does the size of the initial investment affect the internal rate of return on the net present...

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If the net present value of a project is positive, the project earns a return that is Group of answer choices - equal to the required rate or return - greater than the required rate of return - equal to the accounting rate of return - greater than the accounting rate of return
A project's return is referred to as the yield promised by an im·cstment project over its useful life?
is this accurate
Net Present Value Method Net present value (NPV) is one method that can be used to evaluate the financial viability of potential projects. It determines the present value of all future cash flows associated with potential projects and measures this against the cost of the project. To use net present value, a required rate of return must be defined. The required rate of return is the minimum -v acceptable rate of return that an investment must yield for it to make sense economically. Managers often choose a required rate of return above their cost of capital to ensure that the inherent uncertainties surrounding future cash flows is addressed. This can be risky, however, as it biases the process toward short-term projects. If the NPV is positive, then the project should be accepted - V ; if it is negative, then the project should be rejected V. Let's look at a net present value example using the present value of an ordinary annuity table. The company has a project with a 5-year life that…
What refers to the interest rate at which the present work of the cash flow on a project is zero of the interest earned by an investment? Select one: a. Return of investment b. Yield c. Rate of return d. Economic return
Which provides a better estimate of a project’s “true” rate of return, the MIRR or theregular IRR? Explain.
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A MIRR is considered as Present value of Costs is equal to Present value of project minus cost Future value of Terminal value Present value of Terminal value Internal rate of return
The method that measures a projects return based on present values is the: Internal Rate of Return Discounted Payback Period Modified Internal Rate of Return None of the Above
Match the measures of worth in the first column with an appropriate decision rule for preferring a project over “do nothing.”
How does the size of the initial investment affect the internal rate of return on the net present value models?
how many of the following investment criteria always use all of a projects cash flows in their calculation? -NPV -Payback period -IRR -Profitability index